Divorce, foreclosure, and bankruptcies can obliterate a person's credit, making it difficult to get a mortgage loan. Sympathetic lenders may be willing to proceed with financing if the applicant can bring in a co-signer. While there are some benefits to this type of arrangement, risks are also inherent. Premium Mortgage Corporation understands that no two loan applicants are alike and takes into consideration their unique circumstances.
The home loan provider, which has offices in Buffalo, Rochester, and Syracuse, NY, and Barre, VT, shares the responsibilities that come with co-signing on a mortgage loan below.
If a person's credit is impaired, they may be denied financing to secure a house on their own. However, if a relative or other trusted person is willing to be a backup borrower on the mortgage loan, the applicant might have a better shot. The co-signer must have a track record of good credit history. Lenders want to see a strong credit score and stable employment for at least two years.
One of the main benefits of having a co-signer is the loan applicant can start to rebuild their credit through on-time mortgage payments. With diligence and effort, the applicant may not need a co-signer if they want to get a car loan, student loan for college, or other financing in the future.
Another benefit is the applicant could be eligible for a higher loan amount and a lower interest rate. Depending on the co-signer's credit, they can expand the types of homes and geographic locations available to the applicant.
Having someone co-sign on a mortgage loan means trust and giving up a bit of control. The co-signer has determined the applicant will honor their financial obligations until the loan is paid off. If the debt isn't completely honored, the lender will expect the co-signer to take over the debt.
Regarding control, the co-signer must relinquish it and depend on the applicant to do what's required. Their good credit history is vulnerable if their relative or friend doesn't fulfill their end of the mortgage loan agreement. The situation can become complicated, and unfortunate outcomes such as broken friendships, lawsuits, and unpaid debt may occur.
Owning a home is a goal many people strive for. Making the dream a reality means asking hard questions about whether a co-signer is the ideal solution. Let the team of experienced and professional loan officers at Premium Mortgage Corporation help provide personalized guidance. For more information on mortgage loan co-signing, visit one of the company's offices, which can be found online.
Premium Mortgage Corporation can also be reached at:
2541 Monroe Avenue
Rochester, NY 14618
NMLS #3254 Equal Housing Lender
Licensed Mortgage Banker NYSDFS